CHIEF
      OPERATING OFFICER

    


    


    Effective:
      January 1, 2008

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    CHIEF
      OPERATING OFFICER

    


    PURPOSE:
      To define the compensation plan for the CHIEF OPERATING OFFICER. 

    


    SCOPE:
      Perma-Fix Environmental Services, Inc. 

    


    POLICY:
      The Chief Operating Officer Officer Compensation Plan is designed to retain,
      motivate and reward the incumbent to support and achieve the business, operating
      and financial objectives of Perma-Fix Environmental Services, Inc. 

    


    BASE
      SALARY: The Base Salary indicated below is paid in equal periodic installments
      per the regularly scheduled payroll. 

    


    PERFORMANCE
      INCENTIVE COMPENSATION: Performance Incentive Compensation is available based
      on
      the Company’s financial results noted in Schedule A. Performance incentive
      compensation prepayments are payable in the month following each calendar year
      quarter and annual performance incentive pay is payable in the month following
      the close of the company’s financial books.

    


    SEPARATION:
      Upon voluntary or involuntary separation from the Company the employee will
      be
      paid the base salary due to the last day of employment. If employment is
      separated prior to a regularly scheduled quarterly or annual incentive
      compensation payment period as noted above, no incentive compensation is due
      to
      the incumbent. 

    


    ACKNOWLEDGEMENT:
      No Base Salary or Performance Incentive Compensation of any type will be
      provided until the Human Resources Department has received a signed
      acknowledgement of receipt of the Compensation Plan. 

    


    INTERPRETATIONS:
      The Compensation Committee of the Board of Directors retains the right to
      modify, change or terminate the Compensation at any time and for any reason.
      It
      also reserves the right to determine the final interpretation of any provision
      contained in the Compensation Plan and it reserves the right to modify or change
      the Revenue and Net Income Targets as defined herein in the event of the sale
      or
      disposition of any of the assets of the Company. While the plan is intended
      to
      represent all situations and circumstances some issues may not easily be
      addressed. The Compensation Committee will endeavor to review all standard
      and
      non-standard issues related to the Compensation Plan and will provide quick
      interpretations that are in the best interest of the Company, its shareholders
      and the incumbent. 


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    CHIEF
      OPERATING OFFICER

     

    Base
      Pay and Performance Incentive Compensation Targets

    


    The
      compensation for the below named individual as follows:

    


    
      	
              Annualized
                Base Pay:

            	 	
              $

            	
              216,320

            	 
	
              Performance
                Incentive Compensation Target (at 100% of Plan):

            	 	
              $

            	
              108,160

            	 
	
              Total
                Annual Target Compensation (at 100% of Plan):

            	 	
              $

            	
              324,480

            	 


    

    


    The
      Performance Incentive Compensation Target is based on the schedule below.


    


    
      	
              Target Objectives

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	
              Performance
                Target Thresholds

            	 
	 	 	
              Weights

            	 	
              85-100%

            	 	
              101-120%

            	 	
              121-130%

            	 	
              131-140%

            	 	
              141-150%

            	 	
              151-160%

            	 	
              161%+

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Revenue

            	 	 	
              15

            	
              %

            	 	
              16,224
                

            	 	 	
              19,469
                

            	 	 	
              21,094
                

            	 	 	
              22,780
                

            	 	 	
              24,335
                

            	 	 	
              25,958
                

            	 	 	
              28,392
                

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Net
                Income

            	 	 	
              55

            	
              %

            	 	
              59,488
                

            	 	 	
              71,386
                

            	 	 	
              77,337
                

            	 	 	
              83,287
                

            	 	 	
              89,231
                

            	 	 	
              95,181
                

            	 	 	
              104,104
                

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Health & Safety

            	 	 	
              15

            	
              %

            	 	
              16,224
                

            	 	 	
              19,469
                

            	 	 	
              21,094
                

            	 	 	
              22,780
                

            	 	 	
              24,335
                

            	 	 	
              25,958
                

            	 	 	
              28,392
                

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Permit & License Violations

            	 	 	
              15

            	
              %

            	 	
              16,224
                

            	 	 	
              19,469
                

            	 	 	
              21,094
                

            	 	 	
              22,780
                

            	 	 	
              24,335
                

            	 	 	
              25,958
                

            	 	 	
              28,392
                

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Unbilled Receivables

            	 	
              * If criteria (Item #5) for reducing uniblled AR are not met bonus will be reduced by 15%.

            
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
              108,160
                

            	 	 	
              129,792
                

            	 	 	
              140,619
                

            	 	 	
              151,627
                

            	 	 	
              162,236
                

            	 	 	
              173,056
                

            	 	 	
              189,278
                

            	 


    

     

    
      	
              1)

            	
              Revenue
                is defined as the total consolidated third party top line revenue
                as
                publicly reported in the Company’s financial statements. The percentage
                achieved is determined by comparing the actual consolidated revenue
                to the
                Board approved budgeted revenue. The Board reserves the right to
                modify or
                change the Revenue Targets as defined herein in the event of the
                sale or
                disposition of any of the assets of the Company or in the event of
                an
                acquisition. 

            


    

     

    
      	
              2)

            	
              Net
                Income is defined as the total consolidated bottom line net income
                applicable to Common Stock as publicly reported in the Company’s financial
                statements. The net income will include all subsidiaries, corporate
                charges, dividends and discounted operations. The percentage achieved
                is
                determined by comparing the actual net income to the Board approved
                budgeted net income. The Board reserves the right to make adjustments
                to
                net income so as not to penalize the employee for actions in the
                current
                year which will contribute to net income in future years and it reserves
                the right to modify or change the Net Income Targets as defined herein
                in
                the event of the sale or disposition of any of the assets of the
                Company
                or in the event of an acquisition. The Board further reserves the
                right to
                adjust net income to reflect charges resulting from the vesting of
                incentive stock options.

            


    

     

    
      	
              3)

            	
              The
                Health and Safety Incentive target is based upon the actual number
                of
                Worker’s Compensation Lost Time Accidents, as provided by the Company’s
                Worker’s Compensation carrier. The Corporate Treasurer will submit a
                report on a quarterly basis documenting and confirming the number
                of
                Worker’s Compensation Lost Time Accidents, supported by the AIG Worker’s
                Compensation Loss Report. Such claims will be identified on the loss
                report as “indemnity claims.” The following number of Worker’s
                Compensation Lost Time Accidents and corresponding Performance Target
                Thresholds has been established for the annual Incentive Compensation
                Plan
                calculation for 2008.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Work
                Comp.

              Claim
                Number

            	 	
              Performance

              Target

            	 
	
              7

            	 	 	
              85%
                - 100

            	
              %

            
	
              6

            	 	 	
              101%
                - 120

            	
              %

            
	
              5

            	 	 	
              121%
                - 130

            	
              %

            
	
              4

            	 	 	
              131%
                - 140

            	
              %

            
	
              3

            	 	 	
              141%
                - 150

            	
              %

            
	
              2

            	 	 	
              151%
                - 160

            	
              %

            
	
              1

            	 	 	
              161%
                Plus

            	 


    

     

    
      	 	
              4)

            	
              Permits
                or License Violations incentive is earned/determined according to
                the
                scale set forth below:  An “official notice of non-compliance” is
                defined as an official communication from a local, state, or federal
                regulatory authority alleging one or more violations of an otherwise
                applicable Environmental, Health or Safety requirement or permit
                provision, which results in a facility’s implementation of corrective
                action(s). 

            


    

     

    
      	
              Permit
                and 

              License
                Violations

            	 	
              Performance

              Target

            	 
	
              7

            	 	 	
              85%
                - 100

            	
              %

            
	
              6

            	 	 	
              101%
                - 120

            	
              %

            
	
              5

            	 	 	
              121%
                - 130

            	
              %

            
	
              4

            	 	 	
              131%
                - 140

            	
              %

            
	
              3

            	 	 	
              141%
                - 150

            	
              %

            
	
              2

            	 	 	
              151%
                - 160

            	
              %

            
	
              1

            	 	 	
              161%
                Plus

            	 


    

    


    
      	 	
              5)

            	
              Unbilled
                trade receivables is the amount of unbilled reported per 10Q or 10K
                combining both the long term and current portion of unbilled. Unbilled
                trade receivable balances older than 12/31/06 should be reduced by
                $3
                million from $7,543,708 as of 12/31/07 to $4,543,708 by
                12/31/08.

            


    

    


    
      	 	
              6)

            	
              No
                performance incentive compensation will be payable for achieving
                the
                health and safety and permit and license violation targets unless
                a
                minimum of 70% of the net income target is
                achieved.

            


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    Performance
      Incentive Compensation Prepayments

    


    Performance
      incentive compensation will be prepaid each calendar to be applied against
      the
      annual performance incentive compensation when payable. This prepayment will
      be
      calculated as follows:

    


    First
      Quarter – a prepayment of the performance incentive compensation will be
      earned and payable by a comparison of the Board approved budget for the first
      quarter to the actual result for the first quarter. With regard to the Health
      and Safety and the Permit and License Violations incentive, the number of claims
      or violations for the performance target shall be one quarter of the annual
      number. The prepayment will be 15% of the performance incentive compensation
      which will be earned for the full year if this percentage achievement of the
      targets is maintained for the full year. 

    


    Second
      Quarter – a prepayment of the performance incentive compensation will be earned
      and payable by a comparison of the Board approved budget for the first and
      second quarters to the actual result for the first and second quarters. With
      regard to the Health and Safety and the Permit and License Violations incentive,
      the number of claims or violations for the performance target shall be two
      quarters of the annual number. The prepayment will be 30% of the performance
      incentive compensation which will be earned for the full year if this percentage
      achievement of the targets is maintained for the full year less the amount
      of
      the prepayment paid for the first quarter. 

    


    Third
      Quarter – a prepayment of the performance incentive compensation will be earned
      and payable by a comparison of the Board approved budget for the first, second
      and third quarters to the actual result for the first, second and third
      quarters. With regard to the Health and Safety and the Permit and License
      Violations incentive, the number of claims or violations for the performance
      target shall be three quarters of the annual number. The prepayment will be
      45%
      of the performance incentive compensation which will be earned for the full
      year
      if this percentage achievement of the targets is maintained for the full year
      less the amount of the prepayment paid for the first and second
      quarters.

    


    If
      at the
      conclusion of any calendar quarter, the performance incentive compensation
      prepayment due to an employee is negative as a result of subtracting the
      prepayments paid in previous quarters and the amount exceeds $25,000, the
      company will recover this overpayment by deducting this amount from payroll
      paid
      in accordance with the company’s normal payroll practices.

    


    ACKNOWLEDGMENT:

    


    I
      acknowledge receipt of the aforementioned Chief Operating Officer 2008 -
      Compensation Plan. I have read and understand and accept employment under the
      terms and conditions set forth therein.

     

    
      	
              /s/
                Larry McNamara

            	 	
              8/6/08

            	 
	
              /s/
                Larry McNamara

            	 	
              Date

            	 
	 	 	 	 
	
              /s/
                Jack Lahav

            	 	
              8/6/08

            	 
	
              /s/Board
                of Directors

            	 	
              Date